I linked to this on Tuesday, but it was so good that I had to lift it in its entirety.
via hedgefolios, comes these amusing observations:
You know you are a Permabull when…
– each time the market declines you declare it a "healthy pullback"
– sideways moves are actually just the market "taking a breather" or a "pause"
– missing earnings estimates is ok as long as management confirms next quarter’s guidance
– bad guidance is ok as long as last quarter’s earnings beat estimates
– you criticize any analyst that downgrades your stock from "Strong Buy" to "Buy"
– you applaud poor economic results as good for the market because this time they will cause the Fed to stop raising rates
– any negative market commentary is evidence of a huge "wall of worry" that the market needs to go higher
– you plead that a 10% decline is a "great buying opportunity"
– you blame any market decline on short sellers who just don’t understand
– oil declines to $60 and you expect that will cause the market to head higher
– oil increases towards $70 and you point out how the market has been able to absorb higher oil prices
– you quote the cliches "history repeats itself" for positive things and "it’s different this time" for negative ones
– an inverted yield curve doesn’t concern you at all.
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UPDATE: March 4, 2006 1:41pm
If anyone has additional suggestions, by all means please add them to the growing list in the comments.
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Source:
You Know You are a Permabull When. . .
Hedgefolios
Mike on 02.23.06 @ 2:02 pm
http://hedgefolios.com/read/you-know-you-are-a-permabull-when
Add this:
You are more encouraged by news of reorganizations, layoffs and downsizing, rather than by hiring and expansion.
Forget the terms bull and bear for a minute and just think about this one question:
In one, three, five, ten, or more years are we going to better off than we are now?
If your answer is yes, to whichever time horizon you choose, then it makes sense to buy some stock, or buy real estate or whatever.
If your answer is no then it makes sense to stay in cash.
Despite current problems I think the economy is fundamentally sound and that good companies will continue to improve both earnings and dividends.
I can get about 4.4% right now for some cash type instruments, or I can buy good solid companies that pay around that much in dividends and have a good track record of increasing them each year.
So I buy a little, I hold back a little, I sell a little.
Any timing decision that doesn’t consider price would appear doomed to failure.
What “good, solid” company pays 4.4%? The names I see out there at that level are high-risk names like Merck and Ford, financials like Citi and WaMu, and nicotine vendors like Altria. Sure, you might make money in all those positions. Still, you’ll do so because you’re taking on risk. Don’t fool yourself into thinking that buying high yield is low-risk. High-yield bonds aren’t low-risk, either.
Bull Market – A random market movement causing an investor to mistake himself for a financial genius.
you laugh at anyone concerned about 1.1% GDP growth and call them perma-bears
any bad news that won’t halt the fed’s tightening is ‘temporary’
you buy stocks at 4.5-year highs and forget the entire buy-low advice
you find it impossible not to describe everyone who buys GOLD or SILVER as a “gold bug” despite the metals obvious value as a hedge against paper currency/inflation..
the only time you say the word inflation is either when getting a flat tire fixed or when it is immediately followed by the phrase “is contained” and prefaced by “core rate”
You believe 1.4% dividends are 4.1% dividends because decimal points always confused you in school and you forgot which side goes first.
In a Bull market investors climb a wall worry. In a Bear market investors slide down a slope of hope. PermaBulls are now hoping for a lot of things — that the Fed would stop raising rates soon; that the housing Bubble won’t burst; that oil would go to $40 etc etc.
WCW, In January I bought a few names like DUK USB BAC and a few others. BAC in particular has a ten year track record of increasing dividends.
I like solid dividend payers preferably with the proven ability to raise dividends in good times and bad.
Right now with cash offering more than most companies dividends I am just picking up a few more names here and there. But as long as they don’t cut the dividend but keep increasing them, I really don’t care if they goes down 20% in price just to end up back where they are right now in five years.
Any day the market is down, it’s due to oil prices…whether they are up or down.
That’s one energy, two financials. Both could make you good money; both could get you in trouble.
Say the yield curve stays flat; no matter how smart, no banker can escape the basic equation of banking — lend long, borrow short. Don’t get me wrong, I’m not out of financials, but I am underweight with a flat curve.
Say the current flat curve isn’t an artifact and actually presages an economic downturn. I don’t know Duke’s business at all, but even regulated utilities make less money when energy demand and prices drop in a recession. Cf http://finance.yahoo.com/q/bc?t=5y&s=%5EDJU&l=on&z=m&q=l&c=duk
Plus, a quick scan of the headlines indicates they’re a merger story now, since they’re acquiring Cinergy. If their managers are good, you might have a nice play there. I’m agnostic, but if you get outperformance out of that name it will be because you took on risk — not because you sloughed it off.
That’s all I’m really saying. Unless there market is making a huge mistake, expected returns and expected risks should proxy well for one another.
wcw, you are right on all counts. But I am not looking to speculate and go for a home run. I will sell names like WLP, GILD, and DHR, completely when the market turns but hang on to the decent dividend payers. Of course, this is contingent upon short term rates not going too far above 5.5%. If that happened I would rethink buying more and perhaps sell a litte.
The yield curve does present in interesting challenge for investors. But I think that hedging, for good or ill, has so changed the traditional tools that banks have at their disposal that it is no longer possible to use the yield curve as the end all predictor of bank profits. After all the yeild curve inversion has been forseen for how many years now? If the banks I own stock in are not prepared for it then their management is far worse than I thought possible.
anytime a sector sells off, you think it is to free up money for a tech rally
you name a tech rally after yourself
Did somebody really say this?
” I really don’t care if they goes down 20% in price just to end up back where they are right now in five years. ”
I hope someday I have so much money I can afford to say this. For now though, I have to think there has got to be a better way.
You can’t meet a margin call.
You have a poster of Joe Battipaglia above your bed.
A friend IMs
“when yields spike up you say its good because a “reallocation into stocks” trade is happening.”
We know you’re a permaBull when
Abby Joseph Cohen is your favorite
Market Guru.
When you want to short a stock because the damn stock went up too much too fast !!
You find yourself saying Boo-Yah Ski-Daddy way too often.
You Know Youre a Permabull
From HedgeFolios.com, via Barry Ritholtz at The Big Picture:
You know you are a Permabull when……
– each time the market declines you declare it a “healthy pullback”,
– sideways moves are actually just the market “taking a breather” or a …